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- Affiliate and Family Member Relationships Under the Paycheck Protection Program: Top Five Things for Lenders to Know in Navigating Potential Conflicts of Interest
Affiliate and Family Member Relationships Under the Paycheck Protection Program: Top Five Things for Lenders to Know in Navigating Potential Conflicts of Interest
April 23, 2020, Covington Alert
As the Paycheck Protection Program (“PPP”) is about to re-open following passage of a bill that will provide additional $310 billion in funds to the program (including funds reserved for loans by certain small and mid-sized lenders), the rules of the Small Business Administration (“SBA”) that prohibit or restrict loans to the small business ventures of bank officers, directors, and investors – and their family members – again take on renewed importance. Because the SBA rules on conflicts of interest and self-dealing range widely over individuals and small companies, they present compliance risk as well as reputation and litigation risk. The necessary speed in making loans under the program before the additional funds are exhausted, however, makes it extremely difficult for a lender to develop new policies and procedures that are specific to the program.
April 9, 2020, Covington Alert
Today, the Board of Governors of the Federal Reserve announced the creation of four new liquidity facilities and the expansion of three previously announced liquidity facilities to provide credit to borrowers impacted by the COVID-19 pandemic. Whereas the previously announced programs primarily targeted certain financial markets and their participants (such as ...
March 24, 2020, Covington Alert
On March 23, the Board of Governors of the Federal Reserve System (the “FRB”) announced the latest in a series of extraordinary actions intended to help mitigate the impacts of the COVID-19 pandemic on the U.S. economy. Unlike the measures announced last week – which mostly involved re-establishing emergency programs that were used during the 2008–09 financial ...
March 19, 2020, Covington Alert
Yesterday, on March 18, 2020, the Board of Governors of the Federal Reserve System (“Board”) announced the creation of a Money Market Mutual Fund Liquidity Facility (“MMLF”) to provide liquidity support to money market mutual funds (“MMMFs”) by facilitating their sale of certain assets in order to meet redemption requests. Under the MMLF, the Federal Reserve ...